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Delta Engineered a Pricing System That Sorts You by Economic Value

Delta's New AI-Powered Pricing Strategy Delta Air Lines is embarking on a bold experiment in airfare pricing. At a recent investor presentation, the airline announced plans to expand its use of artificial intelligence for setting ticket prices to cover 20% of its U.S. domestic flights by the end of

And indeed, modernizing pricing technology is a pressing need across the industry - airline revenue management systems have changed little since the 1990s, and many carriers still rely on 26 standard fare classes and manual rules that AI hopes to transcend. Interestingly, earlier this year Senators Blumenthal and Josh Hawley questioned Frontier and Spirit airlines about whether they were using personalized algorithms to jack up ancillary fees (like seat selection charges) based on who the customer is. In sum, while Delta is currently taking the spotlight (and heat) for AI pricing, its competitors - from budget airlines to foreign flag carriers - are closely watching and in many cases experimenting with their own algorithms.

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